RESEARCH: Ferro-alloy prices forecast to maintain momentum through Q3 2021

This month’s key ferro-alloy forecast highlights:

• Bulk and noble alloys both moved largely in line with our price forecasts globally over the past month, though several markets surprised to the upside, exceeding our forecast gains. Stronger-than-forecast pricing momentum was primarily triggered by supply shortages in numerous markets, with alloys facing power supply issues, transportation disruptions and soaring freight costs. We do not expect a rapid improvement in these underlying conditions, particularly with Covid-19 disruptions becoming increasingly prevalent again. Instead, we forecast continued difficulties for buyers in securing sufficient alloy supplies, with prices for most bulk and noble alloys forecast to make further gains in the remaining weeks of the third quarter.

• Manganese alloy pricing gains reflect consumers scrambling to secure material for fourth-quarter smelting schedules amid record high container and freight costs and limited availability from South Africa. Steelmakers in both Europe and the US are already showing interest for manganese alloy feedstocks into the first quarter of 2022 against strong underlying consumption and concerns about sourcing adequate supplies of material next year.

• South African UG2 chrome ore prices moved almost exactly in line with our forecasts this month, with prices climbing to $183 per tonne, up from $161 per tonne in July, and as compared to our forecast price of $184 per tonne for August. As we forecast last month, political unrest in South Africa prompted disruptions to chrome ore shipments and deliveries, propelling ore prices higher. We do not forecast further upward momentum in chrome ore prices in the near term, but do expect prices to remain near current elevated levels.

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